Bruce Nolop, CFO of Pitney Bowes, thinks trying to time acquisitions is as complicated as trying to time the stock market -- and can lead to bad choices. "We'd much rather pay a fair price for something that makes sense than a bargain price for a bad acquisition or anything we don't need," he adds.

In the past six years, Pitney Bowes, the Stamford, Conn., mail-management-equipment company, has spent some $2.5 billion to acquire about 70 small businesses. Executives there set a maximum price they will pay before they begin negotiations. Among its acquisitions: MapInfo, a software business that provides location-technology information used by MapQuest and others, for $408 million. Pitney Bowes's chief rival in the bidding was a private-equity firm. If the negotiation was taking place today, "we might not have had to pay as much for it," says Mr. Nolop.

On the other hand, MapInfo put itself up for sale only after if had been approached by the private-equity firm -- "so competition from this arena cuts both ways," he notes, both heightening competition and providing opportunities.